XJ Company from the U

question 56

Multiple Choice

XJ Company from the U.S.is evaluating a proposal to build a new plant in the United Kingdom.The expected cash flows in pounds are as follows: Year 0,-50; Year 1,25; Year 2,35; Year 3,40.The discount rate in BP is 14% and the discount rate in $US is 12%.The spot rate is $US1.99/BP.Calculate the NPV of the project in BP.

• A)+28.69
• B)+25.86
• C)+42.67
• D)+22.68

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